Legislature(1995 - 1996)

03/20/1996 04:08 PM Senate TRD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
            JOINT TASK FORCE ON INTERNATIONAL TRADE                            
                         March 20, 1996                                        
                           4:08 p.m.                                           
                                                                               
                                                                               
  MEMBERS PRESENT                                                              
                                                                               
 Senator Steve Rieger, Co-Chair                                                
 Representative Beverly Masek, Co-Chair                                        
                                                                               
  MEMBERS ABSENT                                                               
                                                                               
 Representative Alan Austerman                                                 
 Representative Irene Nicholia                                                 
 Representative Brian Porter                                                   
 Representative Caren Robinson                                                 
 Representative Jeannette James                                                
 Representative Pete Kott                                                      
                                                                               
  TASK FORCE AGENDA                                                            
                                                                               
 Work session on draft resolution                                              
                                                                               
  WITNESS REGISTER                                                             
                                                                               
 GREG WOLF                                                                     
 Anchorage Economic Development                                                
   Corporation                                                                 
 550 West 7th Avenue                                                           
 Anchorage, Alaska                                                             
 Telephone:  (907) 258-3700                                                    
 POSITION STATEMENT:  Testified regarding the draft resolution.                
                                                                               
 CHUCK WEBBER, Chairman                                                        
 District Export Council                                                       
 Address and telephone number                                                  
   were not provided                                                           
 POSITION STATEMENT:  Testified regarding the draft resolution.                
                                                                               
 MARK WILSON                                                                   
 District Export Council                                                       
 1400 West Benson, Number 150                                                  
 Anchorage, Alaska 99503                                                       
 Telephone number was not provided                                             
 POSITION STATEMENT:  Testified regarding the draft resolution.                
                                                                               
 BILL NOWELL                                                                   
 District Export Council                                                       
 Address and telephone number                                                  
   were not provided                                                           
 POSITION STATEMENT:  Testified regarding the draft resolution.                
 DEBBY SEDWICK, Assistant to the Commissioner                                  
 Division of Trade and Development                                             
 Department of Commerce and Economic Development                               
 3601 "C" Street, Suite 700                                                    
 Anchorage, Alaska 99503                                                       
 Telephone:  (907) 269-8110                                                    
 POSITION STATEMENT:  Testified regarding the draft resolution.                
                                                                               
 WENDY REDMAN, Vice President                                                  
 Statewide University System                                                   
 University of Alaska                                                          
 P.O. Box 155000                                                               
 Fairbanks, Alaska 99775                                                       
 Telephone:  (907) 474-7311                                                    
 POSITION STATEMENT:  Testified regarding the draft resolution.                
                                                                               
 CHUCK ZAGER                                                                   
 U.S. Department of Commerce                                                   
 Address and telephone number                                                  
   were not provided                                                           
 POSITION STATEMENT:  Testified regarding the draft resolution.                
                                                                               
  ACTION NARRATIVE                                                             
 TAPE 96-5, SIDE A                                                             
 Number 001                                                                    
                                                                               
 CO-CHAIR SENATOR STEVE RIEGER called the Joint Task Force on                  
 International Trade to order at 4:09 p.m.  Members present at the             
 call to order were Senator Rieger and Representative Masek.                   
 Senator Rieger noted the meeting would be teleconferenced to the              
 Anchorage LIO.                                                                
                                                                               
 CO-CHAIR RIEGER indicated there was an additional document that has           
 been circulated.  He explained the Export Council drafted their own           
 document which is titled, "Draft Resolution for Senate/House                  
 Interim Task Force on International Trade."  He said it would be              
 his hope to conclude the work of the Joint Task Force on                      
 International Trade and take testimony from anyone who wishes to              
 give further testimony.  Co-Chair Rieger said he would like to mark           
 up the resolution that was introduced as a draft at the previous              
 hearing with whatever changes people feel are appropriate.                    
                                                                               
 Number 040                                                                    
                                                                               
 GREG WOLF, Anchorage Economic Development Corporation, testified              
 via teleconference in support of the valuable role played by the              
 mission of trade and development, in general, and particularly the            
 services provided by the division's overseas offices in Japan and             
 Korea.  He said Alaska is a prime supplier of many resources or               
 could be in the near future if we aggressively pursue                         
 opportunities.  Mr. Wolf noted Alaska has competition in these                
 markets and it is important to be as proactive as possible in                 
 marketing our exports.  He explained the importance of having a               
 physical presence in other countries of staff that are                        
 knowledgeable about Alaska.  Any attempt to scale back the offices            
 would be detrimental to the state's interest.  It would be a                  
 serious mistake for Alaska to retreat from these markets,                     
 especially at a time when the opportunities are so great.  It would           
 send the wrong message to our trading partners.  He urged support             
 of the maintenance of these offices.                                          
                                                                               
 Number 105                                                                    
                                                                               
 CO-CHAIR RIEGER asked Mr. Wolf to elaborate on what he thinks is              
 representative of who the users are of either the Japan or Korea              
 office.                                                                       
                                                                               
 MR. WOLF referred to the Alaska side and said the users are Alaskan           
 companies seeking to export their products, services or may be                
 looking for a supplier.  From the Japan or Korea side, there are              
 Japanese or Korean companies looking to import Alaskan products,              
 resources or services.  They play a role in assisting with                    
 government efforts in those countries.                                        
                                                                               
 Number 128                                                                    
                                                                               
 CO-CHAIR RIEGER asked if it would make sense that some of the users           
 Mr. Wolf described contribute some user support to the financial              
 cost of maintaining the offices.                                              
                                                                               
 MR. WOLF indicated it is possible, but it isn't common.  Mr. Wolf             
 said he is familiar with the operations of many of the offices in             
 Japan and he isn't aware of them charging user fees for services.             
 He indicated it is something that will have to be looked at.                  
                                                                               
 Number 148                                                                    
                                                                               
 CHUCK WEBBER, Chairman, District Export Council, testified via                
 teleconference from Anchorage.  Mr. Webber informed the committee             
 members his organization's report discusses the position they have            
 taken with regard to exporting in general.  He said he would answer           
 any questions Co-Chair Rieger may have.                                       
                                                                               
 CO-CHAIR RIEGER referred to the third "WHEREAS" clause in the draft           
 resolution and said there is an increased interest in non-Asian               
 markets.  He asked how that would tie in with the heavy financial             
 commitment that Alaska has made to just two countries, Japan and              
 Korea.  He also asked if Alaska should establish more offices like            
 those in other countries or if there is a different approach for              
 the assistance in the other countries compared to Japan and Korea.            
                                                                               
 Number 170                                                                    
 MARK WILSON, District Export Council, testified via teleconference            
 from Anchorage.  He said what they are suggesting in the draft                
 resolution is in points 1 through 6 which may reflect on Co-Chair             
 Rieger's question.  Mr. Wilson referred to whether or not offices             
 should be established in other countries and said he thinks it is             
 something that should be studied.  Mr. Wilson said their position             
 is that they would like to build on what currently exists.                    
                                                                               
 Number 198                                                                    
                                                                               
 BILL NOWELL, District Export Council, testified via teleconference            
 from Anchorage.  He noted he helped write the District Export                 
 Council's report.  Mr. Nowell said we have the attention of the               
 delegation in Washington to thank for the corresponding levels of             
 the Hampton University as well as the backing of the U.S.                     
 Department of Commerce.                                                       
                                                                               
 CO-CHAIR RIEGER noted there is budget pressure across the board.              
 He said his thought would be to not insist on the reduction of any            
 effort, but if it's to be maintained, that there be a reduction of            
 general fund support and that the support be replaced with other              
 funds.  The other question is more of a fundamental question of               
 whether our policy should be more flexible geographically and                 
 whether we should pre-decide that we're going to focus on a small             
 number of countries and really pour our resources there, or, if we            
 should be more equitable in our resources and follow a more demand            
 driven policy that if attention focuses more on Europe in the                 
 future, that we would redirect our assistance there.                          
                                                                               
 Number 260                                                                    
                                                                               
 MR. WEBBER said the Export Council is willing and able to provide             
 some services.  He said they would like to be included in some of             
 the decision making processes.  He noted they would like to offer             
 their input and are gearing to do so.  Mr. Webber continued to                
 inform the committee of the council's expertise in exporting.                 
                                                                               
 Number 278                                                                    
                                                                               
 CO-CHAIR BEVERLY MASEK asked Mr. Webber if he has had a chance to             
 see the draft resolution and, if so, does he have any comments.               
                                                                               
 MR. WEBBER noted he only received the resolution a few minutes                
 before the meeting started and indicated he doesn't currently have            
 any suggestions.                                                              
                                                                               
 Number 340                                                                    
                                                                               
 BILL NOWELL said the resolution alludes to co-location or seeking             
 efficiencies.  He said none of us could agree more that                       
 efficiencies, as a practical matter, is something that needs to be            
 looked at.  Currently, there is no doubt that our international               
 trade effort has been on a sharp increase, at least since the 70s.            
 He said why not review the state and federal agencies as to how               
 they currently stand.  In the District Export Council's review,               
 they didn't feel that (indisc.) to the full range of possibilities            
 of how we might spread our money a little better.  He said the                
 council is heading in the direction of seeking efficiencies.  The             
 targeting of $500,000 over the next two years might be more drastic           
 than he or the council would agree with at this point.                        
                                                                               
 CO-CHAIR MASEK said she and Senator Rieger took that into strong              
 consideration based on the documents and testimony they have                  
 received regarding export.  She noted there is growing strong                 
 support for more of the private industry to get involved and make             
 recommendations.                                                              
                                                                               
 MR. NOWELL asked if there were any questions regarding the District           
 Export Council's resolution.                                                  
                                                                               
 Number 348                                                                    
                                                                               
 CO-CHAIR RIEGER referred to the six points at the end of the                  
 council's resolution and said point 2 says there has to be more               
 convenient and more one-stop access to the potential user.  He said           
 the task force's resolution focuses more on information and the               
 council's focuses more on services.  Co-Chair Rieger referred to              
 point 4 and said that is something he is open to and would be open            
 to including a point in the draft resolution regarding having some            
 export finance information available and acknowledging that it                
 probably has to come through a specialist.  He referred to point 5            
 and said he thinks that is not in conflict.  He said the resolution           
 calls for employing efficiencies as does the council's resolution,            
 and we are supporting maintaining the existence although                      
 transferring to user support as part of those efficiencies.  Co-              
 Chair Rieger said he doesn't think point 6 is in conflict at all.             
 He said he thinks the basic idea is that the trade providers should           
 be driving the process and not the policy makers.  Co-Chair Rieger            
 referred to point 3 and said the task force's resolution is silent            
 on AIDEA.  He referred to point 1 and said he would have to think             
 about what is being called for.  Co-Chair Rieger said he believes             
 that the trade patterns for the state have to be driven by the                
 private sector.  He said he disagrees that Alaska's political                 
 leadership should be setting export policy.                                   
                                                                               
 MR. NOWELL indicated the council had received a letter from the               
 Governor Knowels and read, "I am asking the state's top policy                
 makers in the Department of Commerce and Economic Development from            
 the university (indisc.) to work with your group and other                    
 interested members of the private sector to ensure these issues are           
 addressed quickly and effectively."  He said they were encouraged             
 by receiving that letter.  He said there is so much land and money            
 in Alaska which is under either federal or state government                   
 control.  The private sector needs a proactive strong support in              
 terms of law, regulation and facilities.                                      
                                                                               
 Number 428                                                                    
                                                                               
 MR. WILSON commented on user fees, saying he can understand the               
 background for why that is being looked at.  He said charging user            
 fees has resulted in the "kiss of death" for these offices.  The              
 offices represent something significantly different.  There is no             
 way that those offices, to operate efficiently, can depend on user            
 fees to support them and it's not appropriate.                                
                                                                               
 Number 448                                                                    
                                                                               
 DEBBY SEDWICK, Assistant Commissioner, Division of Trade and                  
 Development, Department of Commerce and Economic Development, was             
 next to testify via teleconference.  She commented on a sentence              
 from the draft resolution, "The combination of efficiencies through           
 consolidation and transfers to user fee support should result in              
 savings of at least $500,000 in 1997, and another $500,000 in                 
 1998;", (NOTE:  Most of Ms. Sedwick's testimony was indiscernible).           
 She asked where the $500,000 figure came from.                                
                                                                               
 CO-CHAIR RIEGER said that number is the number that was put forward           
 to get discussion rolling.  It was looked at in the context of the            
 overall amount of money which goes to international trade and the             
 idea of user support.  He noted the whole process would go to the             
 Finance Committees for their review of what can be done.                      
                                                                               
 Number 466                                                                    
                                                                               
 WENDY REDMAN, Vice President, Statewide University System,                    
 University of Alaska, came forward to address the committee.  She             
 explained the $500,000 presents a problem.  She said her preference           
 would be that there not be a dollar amount and that there be some             
 specific suggestions.  She suggested using the wording "substantial           
 savings."  If that is unacceptable, she would suggest that there be           
 a fixed number and say, "Should result in savings of at least                 
 $500,000 over the next three years or $1 million over the next                
 three years," so that there is some time to do some planning.  Some           
 of the things that have been discussed are things that are going to           
 take a substantial amount of time to do.  Ms. Redman said she                 
 thinks that approach would be easier.                                         
                                                                               
 Number 485                                                                    
                                                                               
 MR. NOWELL commented he thought Ms. Redman's comments are a good              
 idea.  He discussed the overseas communication budget.                        
                                                                               
 Number 500                                                                    
 MR. WEBBER commented on how exporting activity is a great future              
 for Alaska.  He explained their databases that are being created to           
 help with exporting information.                                              
                                                                               
 CO-CHAIR RIEGER discussed the savings that could occur if more                
 information could be made available on-line.                                  
                                                                               
 AN UNIDENTIFIED SPEAKER referred to overseas offices and said he              
 thinks it is important that wherever those offices are that they              
 have sufficient funding to do more than just turn on the lights,              
 pay a few salaries and pay rent.  For them to be effective and to             
 do the things that they need to do on behalf of the state and the             
 companies who do business here, they have to have the resources to            
 actively take part in trade promotion.                                        
                                                                               
 Number 525                                                                    
                                                                               
 CO-CHAIR RIEGER indicated he handed out an amendment in response to           
 testimony taken at the last meeting.  A large number of witnesses             
 testified in favor of an export/finance specialist.  He said he is            
 open to the idea of adding that to the resolution and has drafted             
 some language which would appear as the second resolved clause,               
 "FURTHER RESOLVED that the information services provided should               
 include specialized export finance information which probably will            
 need to be provided through an experienced specialist..."  He said            
 that would be a clause to address the testimony in favor of an                
 export/finance specialist.                                                    
                                                                               
 Number 530                                                                    
                                                                               
 CO-CHAIR MASEK said she had no objection to the wording.                      
                                                                               
 CO-CHAIR RIEGER noted the task force is not the Finance Committee             
 and that the task force is making a recommendation.  He said Ms.              
 Redman's suggestion was that we target a savings of $1 million over           
 three years instead of saying $500,000 per year for two years.  Co-           
 Chair Rieger asked Co-Chair Masek if she has an opinion.                      
                                                                               
 CO-CHAIR MASEK said she liked the wording of $500,000 in 1997                 
 and....                                                                       
                                                                               
 CO-CHAIR RIEGER indicated there are only two members in attendance            
 and there is no further business for the task force to take up.               
                                                                               
 Number 545                                                                    
                                                                               
 CO-CHAIR MASEK said she would like to make some comments.  She said           
 during meetings there has been a lot of talk about what the task              
 force has been doing and what they intend to do.  She said she                
 would like to go on record saying she doesn't approve of some of              
 the back door tactics that were used by the Administration and                
 others to convey the impression that legislators were recommending            
 eliminating overseas offices.  She said when former governors and             
 congressmen receive and act upon false information, it really is a            
 serious matter that she doesn't take very lightly.  Co-Chair Masek            
 said she thinks the task force needs to hear an explanation as to             
 the source of that statement and letters that were sent to the                
 members' offices.  She said she has found that no one in the House            
 or Senate has suggested any action in closing the overseas offices            
 in Japan and Korea.  She is sad to see that sponsors of these                 
 rumors are using well respected officials to respond to a position            
 which in truth does not exist.  If they're going to continue to put           
 out false information like that, she thinks it is important that it           
 is done in a manner that they be accountable and responsible about            
 where they're getting their information from.  Co-Chair Masek said            
 she has not put out any recommendation to close the offices in                
 Japan and Korea.  After hearing a wide range of sides from the                
 working task force on the draft resolution, she believes they are             
 really reasonable and the goals were set out that hopefully all               
 parties could agree on.  She said she would recommend the                     
 resolution be moved in final to the full Finance bodies for further           
 review.                                                                       
                                                                               
 Number 560                                                                    
                                                                               
 CO-CHAIR RIEGER indicated he doesn't have much to add other than to           
 reiterate that at the very first meeting there was a report from a            
 contractor that was working on this, and the chairs, at that time,            
 made it very clear that was not the position of the committee.  He            
 said since that time, the task force has been responding to alarmed           
 parties thinking that there was a position of the chairs or of the            
 committee that they were going to recommend closing the Japan and             
 Korea offices.  It has been a tough ongoing problem, but he hopes             
 it hasn't done damage to the relationship with those countries.               
                                                                               
 CO-CHAIR RIEGER thanked everybody who testified and also thanked              
 the Export Council for the work they have done on this issue.                 
                                                                               
 TAPE 96-5, SIDE B                                                             
 Number 001                                                                    
                                                                               
 CHUCK ZAGER, U.S. Department of Commerce, was next to testify via             
 teleconference.  He noted he is in an awkward position as a                   
 representative of a federal agency which is involved in working               
 with companies throughout the state of Alaska to help them get                
 their products and services to foreign markets.  Mr. Zager said he            
 needs the kind of resources that are available through the Division           
 of Trade and Development through their offices in Tokyo and Seoul.            
 Mr. Zager said he needs the kind of strengths those offices have              
 and the strengths he gets from the World Trade Center.  He thinks             
 with proper support from the state, there will be some dramatic               
 changes.  Mr. Zager referred to Co-Chair Masek's concern and said             
 it is very justified, but in reviewing the draft resolution, dated            
 March 12, the "FURTHER RESOLVED" clause could prove to be the                 
 source of that confusion.  He said if the intent is to move the               
 resolution, the task force might want to take a look at that clause           
 and perhaps clarify the intent.                                               
                                                                               
 CO-CHAIR RIEGER asked if there was further testifiers.  Hearing               
 none, he adjourned the meeting at 4:58 p.m.                                   
                                                                               

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